Thursday, February 10, 2011

Built to Last-Successful Habit of Visionary Companies

Source: Built to Last, by Jim Collins & Jerry I. Porras.

After reading this book, my perspectives regarding what it takes to build visionary companies/organizations have changed. In this book, Collins shattered many of the management myths that exist in the world of business, as following:
Myth 1: It takes a great idea to start a great company.
Reality: Most of the visionary companies started without any specific idea, or outright failures. Collins mentioned the parable of the tortoise and the hare to illustrate that visionary companies often had a slow start, but they win in the long run.
Myth 2: Visionary companies require great and charismatic visionary leaders.
Reality: Collins said that this type of leaders is not required and, in fact, can be a liability to the company's future. Visionary companies need clock builders, not time tellers.
Myth 3: The most successful companies exist first and foremost to maximize profits.
Reality: Visionary companies also need money to be able to continue operating, but their reasons for existence is beyond making money.
Myth 4: Visionary companies share a common subset of "correct" core values.
Reality: There is no "right" set of "correct" core values. The important thing is they have a set of deeply held core values and they are consistent in alignment to those values.
Myth 5: The only constant is change.
Reality:The visionary companies never, or very rarely, change its core ideology, its reason for being. It fiercely preserve the core idealism, while stimulating the progress and change of any other things beside that to adapt to the changing environments.
Myth 6: Blue-chip companies play it safe.
Reality: Visionary companies may appear conservative from the outside but they are not scared to make bold commitments to "Big Hairy Audacious Goals".
Myth 7: Visionary companies are great places to work, for everyone.
Reality: "There is no middle ground." "You will either fit extremely well, or be expunged like a virus."
Myth 8: Highly successful companies make their best moves by brilliant and complex strategic planning.
Reality: The visionary companies tend to discover their best moves through experimentation, through trials and errors. They keep doing what work well, and discard what do not work.
Myth 9: Companies should hire outside CEOs to stimulate fundamental change.
Reality: Most of the CEOs of the visionary companies were groomed within the companies, and they are the ones who truly understand and believe in the preserved core values.
Myth 10: The most successful companies focus primarily on beating on the competition.
Reality: The visionary companies are not motivated by comparing themselves with others or by fear of being left behind. They are motivated by the desire of wanting to always become better, and they can never feel they have done enough or they are good enough.
Myth 11: You can't have your cake and eat it too.
Reality: They believe in being able to get BOTH and not EITHER ONE.
Myth 12: Companies become visionary primarily through "vision statements".
Reality: Making a visionary statement is just one of the thousand steps necessary to become visionary companies.

So, in order to build a visionary company, what kind of mechanisms need to be there? What kind of leader should one become? What are the myths that are commonly believed by society which are wrong, and what are the correct things to believe?

I am inspired to apply these concepts for the rest of my managerial career:
1. Be a clock builder
2. Embrace the “Genius of the AND”
3. Preserve the core/stimulate progress
4. Seek consistent alignment

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